Pardon the dust at Labadie Toyota. The dealership at 909 N. Euclid Ave. is in the midst of a $2 million makeover.

The building improvements are needed to keep up with soaring sales of Toyota products and the dealership's plan to offer Toyota's Scion brand there as well, said Gary Labadie, president of Labadie Auto Co.

Labadie's success comes at a time when the National Automobile Dealers Association predicts the nation's credit crisis and economic turmoil will force 700 dealers to go out of business this year.

Labadie said his company, which has both a large GM dealership and a Toyota dealership on Euclid Avenue, is weathering the storm.

"We're down in some areas and up in other areas. But overall, our business is good," he said.

Labadie said his dealerships have a solid customer base and a reputation for good service that helps sales. That success allows projects like the Toyota dealership renovation to move forward in a tough economy.

To keep up with demand and meet Toyota's corporate image, Labadie Toyota is increasing the size of its showroom, improving customer waiting areas and expanding its service department. The project should wrap up by January.

"We're 40 percent done. The next three months are going to be pretty busy," Labadie said.

Labadie said the project will get rid of the dealership's 30-year-old "winged roof" design and make the building more modern.

Labadie sold its Jeep franchise this summer to the Thelen Chrysler dealership to clear out space to bring in Scion, a Toyota vehicle line aimed at attracting younger drivers. Those vehicles will be available by January, he said.

In just five years since it acquired the Toyota franchise, Labadie Toyota has grown to employ 45 people. The business is overseen by Gary Labadie's son, Marc Labadie.

Gary Labadie said his company hopes to expand again this year by purchasing the Schafer Auto Mall in Pinconning, which sells Chevrolet and Pontiac brands, as well as Chrysler and Dodge. He expects to learn in four to six weeks if the deal is approved.

Schafer owner Russell LaFave said he could not comment on the sale until it is approved by the manufacturers.

Labadie said adding a northern Bay County dealership would increase Labadie's market share and give it a full line of GM products to sell.

According to the Dealership Association, there were 759 new car dealerships in Michigan as of January.